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What’s behind Florida’s Medicaid spending surge: It’s the hospitals

The number of Medicaid enrolees is rising. Payments to hospitals are rising faster. / Source: AHCA

The runup in Medicaid spending is due to hospital reports as much as the numbers of poor.

After all the acrimony, fingerpointing and bitterness about health reform and the surge of the poor placing an undue burden on hard-working taxpayers comes this chart from Florida’s Agency for Health Care Administration.

What’s it show? It’s the hospitals — the hospitals that are behind the unchecked growth in state Medicaid spending, even though their rates have been cut and they’ve cried “crisis” year after year.

Florida’s one of only 10 or 11 states that pays hospitals a per-diem rate rather than a per-service rate. The hospitals themselves must submit cost reports to the state Agency for Healthcare Administration, and each hospital’s per-deim rate is set according to a complex formula.

The result is a reimbursement system that rewards hospitals that are best at working a highly complex and opaque system. Palm Beach Gardens Medical Center is the big winner here.

“In Palm Beach County, seven basic acute care hospitals were paid a range from $769 to $2,257 per day (per Medicaid patient), regardless of the service provided. Boca Raton was at the low end, Palm Beach Gardens was at the high end,” said Liz Dudek, secretary of the Florida Agency for Health Care Administration, on a call with reporters last month.

It means that every hospital is paid a different per-diem rate, depending on what its cost report shows.
(If local communities are willing to put extra money into hospitals’ Medicaid services, they can draw down even more federal matching money, and in Palm Beach County, local taxpayers do just that.)

Gov. Rick Scott, a former hospital chain CEO, tried to undo this rigged system with his rate-banding proposal late last year. Alas, he also coupled the reform idea with a proposal to slash $1.4 billion from overall Medicaid hospital reimbursements, so that he could boost education.

The rate banding proposal died a swift death at the hands of the legislature.

[…] paid, according to their cost reports. Hospitals that are best at working the math reap the rewards.Via blogs.palmbeachpost.com Share this:TwitterFacebookLike this:LikeBe the first to like this […]